■Company Overview

1. Company Overview

Tensho Electric Industries (6776) is a historic synthetic resin (plastic) molded product manufacturer founded in 1936 (Showa 11). The company was the first to convert radio cabinets from wood to plastic. Since then, over a long history, we have been involved in molding and processing of various synthetic resins. Based on the technical capabilities cultivated during that time, the business area has been expanded to the mold business, processing processes such as painting, etc., and is expanding not only domestically but also into overseas production in production. Currently, it is being developed into various fields such as automobile parts, home appliances, OA equipment, mechanical parts, and even large containers and special containers for medical waste.

2. HISTORY

The company's founding dates back to 1936. Since then, we have consistently carried out plastic molding processing as a business. In other words, it can be said that it is a long-established and prestigious plastic processing company.

As for stocks, they were listed on the 2nd section of the Tokyo Stock Exchange (hereafter, Tokyo Stock Exchange) in 1961, and are currently listed on the Tokyo Stock Exchange Standard Market. Until now, there have been many changes in major shareholders, but now a company affiliated with Sanko Co., Ltd., which is a major manufacturer of plastic containers and pallets, is the largest shareholder (holding 33.5% as of the end of 2024/3), and Mitsui & Co. (8031) is in second place (same 13.8%). Incidentally, Mr. Ishikawa Tadahiko (Ishikawa Tadahiko), who is from Mitsui & Co., has been leading the company for a long time, and Fujimoto Kensuke (Fujimoto Kensuke) from Mitsui Chemicals ＜4183＞ is scheduled to become the president and representative director from 2024/6.

3. Business content

(1) Classification of business areas and production types

Our main business is the manufacture and sale of various plastic products and parts. There are several methods for processing plastics, but the company manufactures products by injection molding. In addition to simply manufacturing the final product, there are also cases where product design, mold design/manufacturing, molding, painting, printing, inspection, and delivery are carried out consistently with customers from the beginning of development.

When the company's business is classified by business area, it can be divided into 3 areas: “contract manufacturing,” “joint development,” and “in-house brand,” and further divided into the following 4 production types.

a) Molding business (contract manufacturing)

We manufacture various parts, etc. by receiving production contracts from customers for automobiles, home appliances, OA equipment, etc. In order to respond to minute customer requests, the business is carried out by multiplying the company's “customer-oriented and quality-focused” attitude with a wide range of technologies that create strength, beauty, etc.

b) Molding business (joint development)

Joint development is carried out by bringing in the customer's product planning/development capabilities and the company's product planning/development capabilities. The purpose of this business is to enhance results to multiplication, and it is said that it is a field where “corporate power” to accurately determine areas of expertise is questioned. We have many unique product achievements, such as automatic air freshener diffusers and resin handles.

c) Mold business (contract manufacturing)

It is a business that manufactures molds in response to requests from customers. Speedy and high-quality mold supply has been realized with cutting-edge equipment for mold manufacturing and the company's advanced processing technology, which knows all about molds.

d) Final product business (own brand)

It is a business where the company independently develops its own brand products. A wide variety of original products are on the market, from plastic containers, which are essential for the stock and flow of products, to containers dedicated to medical waste, and rainwater storage tanks that protect lives from damage caused by torrential rains. The company's commitment to the highest quality, which “makes the most of the characteristics of the material called plastic,” has given birth to best sellers, and it is said that it is used at production sites and at the forefront of medical care.

(2) Main products and main destinations

The segments announced in the financial statements are divided into “Japanese molding-related business,” “Chinese molding-related business,” “American molding-related business,” and “real estate-related business,” and the sales ratio (fiscal year ending 2024/3) is 75.3% for Japanese molding-related businesses, 1.7% for Chinese molding-related businesses, 22.0% for American molding-related businesses, and 1.1% for real estate-related businesses. Japan, China, and America, which are segment names, are divided into sales regions by country, and not by product. As for real estate-related businesses, it is a business that rents land and buildings in Sagamihara-shi, Kanagawa-ken and land in Nihonmatsu-shi, Fukushima-ken, and has raised stable profits every fiscal year. Furthermore, Ryumai Plastics Co., Ltd., which became a subsidiary in July 2021, is included in the “Japan Molding-related Business.”

It is not an officially disclosed figure, but according to the company, the main destinations (approximate value) of molding-related businesses in recent years, excluding real estate-related businesses, are about 55% automobile-related products, about 25% for original (in-house) products, and about 20% for home appliances and OA equipment. Products are manufactured at 5 domestic plants (Fukushima, Yabuki, Gunma, Saitama, and Mie), 1 domestic subsidiary plant, and 2 overseas plants (China, Mexico).

a) Automobile-related

We manufacture and sell various products such as various interior and exterior products, engine room parts, dashboards, etc. We do business with all major car manufacturers, but they don't belong to a specific group. Also, parts manufacturers also do business with many tier 1 (companies that directly supply important parts, etc. of products to final product manufacturers) and tier 2 (companies that deliver to tier 1) parts manufacturers.

For automobiles, production is carried out at optimal locations by utilizing the company's network from product design to mold manufacturing to molding to coating to various assemblies, and it responds to a wide variety of customer needs with technical and comprehensive capabilities. What we have been focusing on in recent years is carbon coating technology in the decoration field. The same technology, which makes use of the company's experience and know-how, can be deployed in multiple fields without specializing only in automobiles.

b) Original products

It is a product independently developed by the company, and there are TEMBACO (multipurpose cartridges), tentals (barrel-shaped containers), mipper (special containers for medical waste), rainwater storage and infiltration materials, tensor trucks (conductive printed circuit board storage trucks), etc. used for transporting various products. The profit margin for original products is high.

(Written by FISCO Visiting Analyst Noboru Terashima)